Claims under GC/Works/1 (1998) - Building Contract Claims - page 374

waive his rights to recover liquidated damages, if at all, only by formal
notice. Therefore, the contractor will be unable to argue that the employer's
conduct led him to believe that the employer was waiving his rights in this
respect. 635
However, by going on to state that neither payments, concessions nor
instructions to the contractor nor any other act or omission of the employer
will operate to affect the employer's rights and they will not be deemed a
waiver of rights, the clause seems to go too far. It appears unlikely that what
it seems to be saying is what was intended. It seems to be saying that the
employer's right to recover liquidated damages will not be affected by acts
or omissions of the employer. That is clearly wrong. Liquidated damages
will not be recoverable by the employer if the employer is at all responsible
for failure to achieve the completion date unless there is power to give an
appropriate extension of time and it has been given:

'[The] cases show that if completion by the specified date was prevented
by the fault of the employer, he can recover no liquidated damages unless
there is a clause providing for extension of time in the event of delay
caused by him.' 636

In other words, where completion of the contract works or any section (if
sectional completion applies) in due time has been prevented by the em-
ployer's act or default, the employer cannot recover liquidated damages
from the contractor, unless the PM has granted an extension of time on that
ground: see clause 36(2)(b). This is the case where there is power to extend
time but it has not been properly exercised 637 .
GC/Works/1 (1998) is not a negotiated contract, but is one drawn up on
behalf of the government departments that use it. Accordingly, as indicated
earlier, it is to be construed contra proferentem the employer, whose
document it is. It has been said:

'The liquidated damages and extension of time clauses in printed forms of
contract must be construed strictly contra proferentem . If the employer
wishes to recover liquidated damages for failure by the contractor to
complete on time in spite of the fact that some of the delay is due to the
employer's own fault or breach of contract, then the extension of time
clause should provide, expressly or by necessary inference, for an exten-
sion on account of such a fault or breach on the part of the employer . . . ' 638

No liquidated damages are recoverable where the employer has failed to
extend time when it should do so.
An earlier illustration of this principle is to be found in the case of Miller v.
London County Council 639 . There, a building contract, not on the same terms

635 London Borough of Lewisham v. Shepherd Hill Civil Engineering 30 July 2001, unreported.
636 Astilleros Canarios SA v. Cape Hattera Shipping Co Inc and Hammerton Shipping Co SA [1982] 1 Lloyds
Rep 518 at 526 per Staughton J.
637 Peak Construction (Liverpool) Ltd v. McKinney Foundations Ltd (1970) 1 BLR 114.
638 Peak Construction (Liverpool) Ltd v. McKinney Foundations Ltd (1970) 1 BLR 114 at 121 per Salmon LJ.
639

(1934) 50 TLR 479.